Price tags on life and limbs

Lawmakers fix compensation amounts but do not revise them for decades

There has been a massacre of some 1,500 obsolete colonial laws in Parliament in the past three years. But there are still some relics. Section 59 of the Transfer of Property Act, for instance, says that “where the principal money secured is Rs 100 or upwards, a mortgage can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses”. Where the amount is less than Rs 100, a mortgage may be effected either by registration or by the delivery of the property. Section 510 in the Indian Penal Code proclaims that a drunken person misbehaving in public may be punished with a fine of Rs 10.

Fixing an amount by statute creates a hindrance to equity and justice in compensation claims because the value of money has nowhere to go but down — only the rate of fall changes. Lawmakers are not keen to read every section of legislation and update the amounts mentioned in them to a realistic level. The drunken man might be happy to pay Rs 10 fixed in 1860 and go home on all fours, so to say, but this legislative lapse has serious consequences for victims of accidents and insurance companies.

This was demonstrated last month in a case decided by the Supreme Court dealing with the Employees Co­m­pensation Act. The court was dealing with a provision which stipulated the rate at which compensation for death arising out of employment is to be calculated. A 26-year-old man died in an accident when he was on duty. His salary was Rs 32,000 a month. But the rule prevailing at the time of the death in 2008 had put a ceiling on the salary. It was “deemed”, by a legal fiction, that he was receiving Rs 4,000 only. So the commissioner under the Act awarded Rs 4.33 lakh to the four heirs. When the appeal was filed, the High Court doubled the amount as the statutory presumption of monthly wages had by then been raised to Rs 8,000. The appeal was taken to the Supreme Court. By the time its judgment was delivered, the ceiling was again raised to Rs 15,000. But the court ruled that the “deemed wage” at the time of the fatal accident would prevail and neither the subsequent raises nor the actual wage. Thus this family had to settle for one-third of their due. How much the family actually received in hand after the “contingency fee” de­manded by their lawyer is anyone’s guess.
 

Arbitrary fixing of compensation can stump sensitive judges hearing petitions in road accident cases under the Motor Vehicles Act. This law fixes the amount of damages in hit and run cases; it even has a table in the Second Schedule valuing lost lives and limbs, a feat of legislation. The chart was introduced in 1994 to give quick relief without going into evidence and cause of accidents. The ready reckoner, however, has not been revised since then. In several judgments, the Supreme Court had criticised it as suffering from “severe defects” and an example of bad arithmetic. Co­m­pu­ting compensation according to the table will lead to ridiculously low compensation. The heirs of a 15-year-old boy, for instance, will get Rs 40,000. It would not meet even the legal expenses. Judges with large hearts would not be able to help the dependants.

The Railway Accident and Untoward Incidents (Compensation) Rules raised the amount for compensation in 2016 from Rs 4 lakh to Rs 8 lakh in cases of death or loss of limb of a passenger. There is a table in this law also. Compensation for fracture of hip joint is Rs 1.6 lakh, fracture of pelvis Rs 80,000, loss of one eye Rs 2.40 lakh. These figures are bound to remain so for many years to come, while the value of the rupee might tumble with time. But the judges have to follow what the lawmakers have set in the chart.

The law of torts, from which these laws arose, had originally left the amount of compensation to the good sense of the judges. But when the common law principles were codified, the victims began to suffer by these rigid rules. The law aims to put the victims as much as possible in the original condition. It is mostly a vain effort, but the lawmakers can at least refrain from putting price tags on life and limbs, like hitmen of the underworld.